The Adani Group has put on hold its ambitious $10 billion semiconductor manufacturing project with Israel’s Tower Semiconductor, citing strategic and commercial concerns, according to sources familiar with the matter. The decision follows an internal evaluation that raised doubts about the demand outlook for chips, particularly within India, prompting the conglomerate to reassess the project’s viability.
Initially approved by Maharashtra’s state government in September 2024, the proposed facility was designed to produce up to 80,000 wafers per month and generate around 5,000 jobs, aligning with Prime Minister Narendra Modi’s vision to establish India as a global semiconductor hub under the “Make in India” initiative. However, the Adani Group’s internal review concluded that the domestic market for semiconductors remains nascent, and it is unclear how India would ensure the chips manufactured locally would find sufficient buyers within the country.
Financial disagreements also contributed to the pause. While Tower Semiconductor was expected to provide technological expertise, Adani reportedly sought a greater financial commitment from the Israeli partner, wanting Tower to have “more skin in the game.” Sources indicate that the level of investment Tower was willing to make did not meet Adani’s expectations.
This development represents a setback for India’s semiconductor ambitions, especially after the collapse of a $19.5 billion joint venture between Vedanta and Taiwan’s Foxconn in 2023, which was shelved due to government concerns over costs and delayed approvals. Other major projects, such as Tata Group’s $11 billion chip manufacturing and testing facility and Micron’s $2.7 billion chip packaging plant in Gujarat, continue to progress.
India still lacks an operational semiconductor fabrication plant, underscoring the challenges the country faces in building a self-reliant chipmaking ecosystem. The Adani Group’s cautious stance reflects the broader uncertainty in the sector, with global markets like the US and China dominating semiconductor demand, while India’s share remains relatively small.
Though talks are paused, sources suggest there is a possibility discussions could resume in the future, depending on market conditions and partnership terms. For now, the Adani Group’s move signals a strategic recalibration amid the complex landscape of semiconductor manufacturing and India’s pursuit of technological sovereignty.